mortgage brokerages, lenders and administrators act, 2006 ... · mortgage brokerages, lenders and...

Mortgage Brokerages, Lenders

and Administrators Act, 2006

(MBLAA)

Licensing Overview

www.fsco.gov.on.ca



• Any corporation or other business, carrying on the

business of:

– dealing or trading in mortgages;

– administering mortgages; or

– lending money on the security of real estate

in Ontario, must be licensed with FSCO, unless an

exemption applies.

• Any individual acting as a Mortgage Broker or

Mortgage Agent must also be licensed.

www.fsco.gov.on.ca 2



The MBLAA Licensing Model

• Under the Act, there are four types of licences:

• Mortgage Brokerage – Mortgage Broker

– Mortgage Agent

• Mortgage Administrator




A Mortgage Brokerage:

• Is a corporation, partnership or sole proprietorship

that has a Mortgage Brokerage licence, allowing it to

carry on the business of dealing and trading in

mortgages in the province of Ontario.

• May also lend money for mortgages under its

licence.

• Appoints one Principal Broker to act as its Chief

Compliance Officer. • May authorize or allow licensed Mortgage Brokers

and Mortgage Agents to deal in mortgages on its

behalf. www.fsco.gov.on.ca 4



A Mortgage Broker is a person who: • Deals or trades in mortgages for a Mortgage

Brokerage.

• May be responsible for supervising the activities

of Mortgage Agents. A Mortgage Agent is a person who:

• Deals or trades in mortgages for a Mortgage

Brokerage, under the supervision of a licensed

Mortgage Broker.




A Mortgage Administrator:

• Receives mortgage payments from borrowers

and sends them to investors. • Takes steps on behalf of investors to enforce

payments under mortgages.


Mortgage Brokerage

Licence Requirements

A Mortgage Brokerage must:

• Be incorporated or formed in Canada (for

partnerships and corporations) or be a resident of

Canada (for sole proprietors). • Have a mailing address in Ontario that can receive

registered mail.

• Have errors and omissions insurance which covers

fraudulent acts up to a minimum of $500,000 for any

one occurrence and $1 million for all occurrences

during a 365day period.


Mortgage Brokerage


A Mortgage Brokerage must:

• Be licensed in the Brokerage’s legal name, or in both

its legal name and one trade name registered under

the Business Names Act with the Ministry of

Government and Consumer Services (MGCS).

• Meet the suitability requirements that are listed in

the regulations along with its sole proprietor,

partners or officers and directors (as applicable).

• Designate a Principal Broker


Mortgage Brokerage

Principal Broker

A Principal Broker must:

be a licensed Mortgage Broker and – a director or officer, if the Brokerage is a

corporation;

– a partner, if the Brokerage is a partnership (other

than a limited partnership);

– a general partner, or a director or officer of a

corporation that is a general partner, if the

Brokerage is a limited partnership;

– the owner/sole proprietor, if the Brokerage is a

sole proprietorship.


Mortgage Brokerage

Principal Broker

The Principal Broker:

• Makes sure that Mortgage Brokers and Mortgage

Agents are adequately supervised.

• Ensures that the Mortgage Brokerage and each

Mortgage Broker and Mortgage Agent follow all

the regulations and requirements that apply under

the Act.

• Ensures that the Mortgage Brokerage takes

reasonable steps to deal with any breaches of the

Act. www.fsco.gov.on.ca 10

Mortgage Brokerage

Principal Broker


• Reviews the Mortgage Brokerage’s policies and

procedures to ensure the Mortgage Brokerage

follows the Act and that Mortgage Brokers and

Mortgage Agents are adequately supervised.

• Signs and approves any trust account

reconciliation statements prepared by the

Mortgage Brokerage to confirm that they are

accurate. www.fsco.gov.on.ca 11

Mortgage Brokerage

Principal Broker


• Initiates applications for appropriate candidates

for a Mortgage Broker or Mortgage Agent licence.

• Reviews applications for completeness,

background suitability, and education and

equivalency requirements.

• Provides final approval for all licence applications.

• Is FSCO’s primary contact at the Mortgage

Brokerage concerning licensing applications.


Application Process:

Brokerages

Brokerage Application Review Process • FSCO will review applications for Mortgage

Brokerage licences. Incomplete applications will

be returned.

• After an initial review, the Mortgage Brokerage

will be granted limited access to Licensing Link.

• Access to Licensing Link will allow the Mortgage

Brokerage to: – Submit the application for the Principal Broker

and declarations for Directors and Officers.



Brokerages

Brokerage Application Review Process • The Principal Broker’s application and

declarations for Directors and Officers must be

submitted before the Mortgage Brokerage

application can be finalized.

• Once the application is finalized, the Mortgage

Brokerage will be granted full access to Licensing

Link, allowing applications for Mortgage Brokers

and Mortgage Agents to be initiated and

submitted.



Brokerages

Brokerage Application Review Process • No hard copy licence will be issued.

• FSCO’s online registry of licencees is posted on

FSCO’s website.



Brokers

An applicant for a Mortgage Broker licence must:

• be 18 years of age or older;

• be a resident of Canada;

• have a mailing address in Ontario that can receive

registered mail;

• be authorized by a Mortgage Brokerage to deal or

trade mortgages on its behalf (may only work for

only one Mortgage Brokerage);

• meet education and experience requirements; and


• have a valid email address.


Agents

An applicant for a Mortgage Agent licence must:

• be 18 years of age or older;

• be a resident of Canada;

• have a mailing address in Ontario that can receive

registered mail;

• be authorized by a Mortgage Brokerage to deal in

mortgages (may only work for one),

• meet Mortgage Agent education and equivalency

requirements; and

• have a valid email address.


Broker and Agent Application Process


Brokers and Agents

• Applications are initiated by an established Mortgage Brokerage via

Licensing Link.

• Completed applications are submitted back to the Mortgage

Brokerage electronically.

IMPORTANT:

• The Principal Broker reviews the application, addresses deficiencies,

and gives final approval of the application.

Remember:

• Each Mortgage Broker and Mortgage Agent may only work for one

Mortgage Brokerage.



Brokers and Agents

Broker and Agent Application Review Process

• FSCO reviews applications submitted by

Brokerage for applicant education and equivalency

requirements, and suitability. • No hard copy licences will be issued.

• FSCO’s online registry of licencees is posted on

FSCO’s website.


Mortgage Administrator


A Mortgage Administrator must:

• Be incorporated or formed in Canada (for

partnerships and corporations) or be a resident of

Canada (for sole proprietors). • Have a mailing address in Ontario that can receive

registered mail.

• Have errors and omissions insurance which covers

fraudulent acts up to a minimum of $500,000 for any

one occurrence and $1 million for all occurrences

during a 365day period.


Mortgage Administrator


A Mortgage Administrator must:

• Be licensed in the Administrator’s legal name, or in

both its legal name and one trade name registered

under the Business Names Act with the Ministry of

Government and Consumer Services (MGCS).

• Meet the suitability requirements that are listed in

the regulations along with its sole proprietor,

partners or officers and directors (as applicable).

• Prove it has a financial guarantee for $25,000

(unimpaired working capital or some other financial

guarantee in a form approved by the


Superintendent).

Mortgage Brokerages, Lenders and Administrators Act, 2006

END

www.fsco.gov.on.ca

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